Appeal for Gold Bounces Up Amid Weaker Dollar

The bullion asset recorded impressive gains at the fourth trading session of the week with global investors awaiting further signals on the U.S economy as the greenback traded near its three-week lows, further boosted gold bugs in breaking above $1745 an ounce.

Historically the U.S dollar, normally moves inversely to the yellow metal, giving gold bugs enough gas to take hold of the metal’s market momentarily with appetite for the safe-haven currency diminishing day by day.

Consequently, triggering more upsides for gold prices are recent comments coming from Fed Chairman Jerome Powell that major risks include another spike in COVID-19 caseloads and perhaps resistant strains that might prove difficult to cure.

However, U.S economic recovery remains on course thanks to rising consumer optimism, as monetary officials added that the United States is on track for faster growth and better employment readings in the coming months.

Such macros might limit the precious metals, on the bias that investors will shun non-yielding investments thereby putting gold bugs on a herculean mission breaking above $1,800 price level, despite the weakening dollar. partly because investors have pushed in record levels towards the crypto-verse as the flagship crypto and other altcoins stay bullish.

Gold bulls have built a baseline around the $1730 pivot zone, suggesting that the bullion asset might stay within the current range, as the appetite for risk broadens with the greenback’s pullback and plunging Treasury yields.

That being said, the precious metal has lost much of its appeal this year compared to 2020 with price actions deteriorating in favor of gold bears rather than gold bugs, still, deep corrections of gold prices are viewed as buying opportunities.

For a look at all of today’s economic events, check out our economic calendar.